Growth in GDP doesn't necessarily translate into job growth.

[lindashaw]

Lester Thurow says that job growth must be more than growth in GDP to start recovering.

To generate jobs an economy's rate of rate of growth of output has to be higher than its rate of growth of productivity. In 2001 the GDP was 0.3 percent above that in 2000 despite three negative quarters. At the same time productivity grew 1.1 percent. To find the number of jobs lost, measured in hours of work, the rate of growth of productivity is subtracted from the rate of growth of output and as a result the American economy lost 0.8 percent of its jobs. In 2002 productivity grew by 4.7 percent - the best performance in 50 years. That productivity performance is good long run news but in the short run it means that output must then grow at more than 4.7 percent if employment is to rise. It didn?t and if one subtracts 4.7 percent from 2.8 percent one is left with a loss of jobs of 1.9 percent. In the recovery year of 2002, the jobs lost were more than twice as big as it was in the recession year of 2001.


http://www.lthurow.com/articles/print/USRecovery.html

[PunkinPi]

1. and thus the unresponsive stock market

when this news was announced.

[papau]

2. Thurow is correct but doesn't mention that "productivity" can be increased

by simply decreasing wages - if you consider that a good thing, so be it.

It is the arguement the GOP uses for reducing any union power left in this country.

What you got paid - income after inflation and taxes - despite the 100 billion lower tax - albeit on the rich - this year compared to last year still has decreased.

Indeed family income decreased in the 3rd quarter 2004.

[rogerashton]

3. No it cannot.

Lower wages would have no effect on "Value Added," the company performance statistic used in the measurement of productivity. Don't believe what Republicans tell you. They lie.